Texas Court Affirms Crude Oil Tax Exemption Under Import-Export Clause

The Texas Court of Appeals, Thirteenth District, affirmed that crude oil stored in coastal tank farms in San Patricio County is exempt from state property taxation under the Import-Export Clause of the U.S. Constitution. The dispute arose when the county appraisal district assessed ad valorem taxes on millions of barrels of crude oil stored in tanks awaiting export, valued at over $55 million combined. Applying the “stream of export” doctrine, the court determined that the oil had entered the export stream upon arrival at the tanks due to its precommitted foreign destination, and that the temporary storage served an exportation ...